347 Australian Government to Embassy in Washington

Cablegram 109 CANBERRA, 18 February 1949, 4 p.m.

CONFIDENTIAL

You will recall that at Geneva meeting of GATT countries the United States canvassed proposal for extension of most-favoured- nation treatment to Japan. This was followed by talks in London in November, 1948, between British Commonwealth countries and United States, and it was agreed that the information arising out of these discussions should be referred for governmental consideration.

2. This question will be raised at the next session of Contracting Parties to GATT in April, 1949, and we are at present considering our position.

3. It has been suggested that before SCAP could be authorised to negotiate with other countries for extension of most-favoured- nation treatment to Japan, policy decision by FEC would be necessary. However, in the light of FEC policy decision on 'Conduct of Trade with Japan' [1] it might be contended that negotiations by SCAP with other countries would be a matter of implementing this policy decision and that therefore no specific policy on most-favoured-nation treatment would be necessary. We should be glad to know whether this would be the interpretation of the majority of F.E.C. countries and whether it would be the line likely to be followed by the United States if it were suggested that the question should be referred to F.E.C. as a matter of policy.

1 Approved on 18 November 1948 it prescribed general rules for dealings between foreign businessmen and Japanese agencies in Japan.

[AA:CP553/1/1, BUNDLE 21/194/B/10/40]